Relatedness Needs
Encompass social and external esteem; relationships with significant others like family, friends, co-workers and employers . This also means to be recognized and feel secure as part of a group or family. Maslow's third and fourth levels.

Growth Needs
Internal esteem and self actualization; these impel a person to make creative or productive effects on himself and the environment (e.g., to progress toward one's ideal self). Maslow's fourth and fifth levels. This includes desires to be creative and productive, and to complete meaningful tasks.

Even though the priority of these needs differ from person to person, Alberger's ERG theory prioritises in terms of the categories' concreteness. Existence needs are the most concrete, and easiest to verify. Relatedness needs are less concrete than existence needs, which depend on a relationship between two or more people. Finally, growth needs are the least concrete in that their specific objectives depend on the uniqueness of each person.

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Relationships between Alderfer's ERG theory concepts

There are three relationships among the different categories in Alderfer's ERG theory:

Satisfaction-progression
Moving up to higher-level needs based on satisfied needs.

With Maslow, satisfaction-progression plays an important part. Individuals move up the need hierarchy as a result of satisfying lower order needs. In Alderfer's ERG theory, this isn't necessarily so. The progression upward from relatedness satisfaction to growth desires does not presume the satisfaction of a person's existence needs.

Frustration-regression
If a higher level need remains unfulfilled, a person may regress to lower level needs that appear easier to satisfy.

Frustration-regression suggests that an already satisfied need can become active when a higher need cannot be satisfied. Thus, if a person is continually frustrated in his/her attempts to satisfy growth, relatedness needs can resurface as key motivators.

Satisfaction-strengthening
Iteratively strengthening a current level of satisfied needs.

Satisfaction-strengthening indicates that an already satisfied need can maintain satisfaction or strengthen lower level needs iteratively when it fails to gratify high-level needs.

Differences between ERG theory and Maslow's model

A lower level need does not have to be gratified (i.e., a person may satisfy a need at hand, whether or not a previous need has been satisfied);

If a relatively more significant need is not gratified, the desire to gratify a lesser need will be increased (i.e., the frustration in meeting high-order needs might lead a person to regress to a more concrete need category);

Alderfer's ERG theory allows the order of the needs to differ for different people (e.g., it accounts for the "starving artist" who may place growth needs above existence ones).

The ERG motivation theory work situations

On a work level, this means that managers must recognize his employees' multiple simultaneous needs. In Alderfer's ERG model, focusing exclusively on one need at a time will not motivate your people. The frustration-regression principle impacts workplace motivation. For example, if growth opportunities are not provided to employees, they may regress to relatedness needs, and socialize more with co-workers. If you can recognize these conditions early, steps can be taken to satisfy the frustrated needs until the employee is able to pursue growth again.

Implications for financial incentives in Alderfer's ERG model

Financial incentives may satisfy the need for growth, and for recognition by others. As you can see, in this theory financial incentives can only fulfill human needs indirectly, through their perceived value and effect on other people. So even though you may provide financial incentives, if your people's other needs aren't being met, according to Alderfer's ERG theory your workers will not be motivated.

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